- He/she builds up a nest egg without having to do anything – All they need to do is to make use of Iemas’ services
- This nest egg is tax free (tax only applicable to interest received)
- He/she receives interest on the fund at an excellent rate
- Can serve as security for loans where Iemas requires security
- A member’s accumulated DBPF is paid out to the member when he/she terminates membership or he/she reaches retirement age
Underinsurance is a potential risk for any home owner and can cause problems and losses, especially with the insurance of buildings and household goods. Underinsurance basically means that, in the event of a claim, the insured amount is deemed to be less than the actual value of the property or possessions.
The following is an example of how underinsurance is calculated:
Insured amount of building R800 000
Actual value of building R1 000 000
Amount of claim R 50 000
X Claim amount = Settlement amount
R 800 000
R 1 000 000
X R50 000 = R40 000
In other words, due to underinsurance, only 80% of the claim amount will be payable to the client or, in this example, R40 000.
Due to the sudden and dramatic increase in building costs in the past couple of years, the number of property claims that were reduced because of underinsurance has increased.
We therefore urge you to review your property’s insured value to establish whether it is sufficient. In order to make this evaluation process easier for you, your Iemas policy provides for an automatic inflation increase to the insured amount of your building. This increase takes effect on the anniversary (the renewal date) of your policy in order to protect you from underinsurance due to inflation. However, this increase may not be adequate, as replacement values etc. are constantly changing and it is the responsibility of the owner of the property to ensure that the insured amounts are adequate at all times.
Value of your property 24,000
Sum Insured 18,000
In the event of a claim of R12,000 the insurance company will only pay you as follow:
R18,000/R24,000 X R12,000/1 = R9,000
You insure your belongings against burglary or theft but also against the elements. Can you afford to be covered for only part of your loss when your house burns down or is flooded in a storm?
- Standard or basic excess – An excess is a specified amount of money or percentage that you are liable to pay as a first amount payable in the event of any claim being settled.
- Additional excess – In some instances an additional excess might apply. This will be in addition to your basic excess for example when the driver is under the age of 25 years and the policy states you have to pay R1,000 for drivers under the age of 25.
- Voluntary excess – This is an excess you choose. The voluntary excess is in addition to both basic excess and the additional excess of the policy.
- A very big increase (much more than inflation) in the cost of repairing vehicles occurred in the last few years. Because a lot more money is now paid out per claim, the portfolio comes under pressure if additional money is not generated.
- The roads and infrastructure in our country have suffered as a result of the big increase in the number of vehicles on our roads. This has lead to more accidents.
- The low interest rates and creative deals put together by vehicle dealers and financing houses have put a large number of people in a position where they could afford to buy expensive vehicles, often without the necessary driving experience.
It was not used in the past because technology was limited in terms of gathering sufficient amounts of data. The rating model was also extensively tested for accuracy, and this happened over a period of years. We have reached a stage where we can very accurately determine exactly what percentage any individual should be paying into the premium pool to make it fair to everyone.